SC tells KFA to pay I-T dept 50% of TDS it had collected

Vijay Mallya's Kingfisher Airlines suffered a setback on Friday as the Supreme Court dismissed it's appeal challenging the Karnataka High court directive to pay 50% of R371 crore to the Income-Tax Department, which KFA had collected from its employees as tax deducted at source from their salaries.

A bench of Justice RM Lodha and Justice Madan B Lokur refused to grant more time to pay off taxes and TDS from staff salaries. SC had in January allowed Kingfisher to settle its dispute with I-T within four weeks. On Friday, cash-strapped KFA sought another extension of three weeks.

"It is a serious liability. You have deducted tax from employees but have not paid the I-T department," the bench said, dismissing the petition.

Kingfisher had moved SC on January 16 against December 5 HC order that had also directed the company to furnish bank guarantee for the remaining amount of R371 crore within six weeks. The airline's licence was suspended on December 31 last year after it failed to come up with the revival plan. The firm apparently has liabilities of over R15,000 crore as debt, accumulated losses and various dues.

In its appeal, Kingfisher contended the amount due was much less than the I-T demand and claimed it hadn't got proper opportunity to hear its case.

During the appeal's hearing on January 22, Kingfisher was given four weeks time after its counsel candidly admitted the company was not in a position to pay its dues. It was also argued that the appellate tribunal's order quashing the demand on the ground that the assessing officer had failed to take into account Kingfisher's versions before assessing the demand.

"We are trying to keep our heads above water. It is a mess. We have to make basic payments. We keep shuffling (funds) around," Kingfisher's advocate had said.